Both companies reportedly at times refused to participate in the program, although U.S. Verizon Wireless parent company Verizon Communications Inc. (VZ) did turn in information on its land lines, which it solely serves. And reportedly the U.S. government did not challenge theirt waivering cooperation.

Foreign co-owned carriers have reportedly been less than enthusiastic about Bush and Obama administration spying. [Image Source: AP]

But don't worry -- says the source -- Verizon Wireless and T-Mobile customers are still able to be monitored anyways. Most of that traffic on Verizon or T-Mobile is at some point routed through connections owned by solely-U.S.-owned telecoms like AT&T, Inc. (T) or Sprint Nextel Corp. (S). Thanks to this wonderful routing, the source assures, approximately 99 percent of phone traffic in the U.S. is monitored by the NSA.

T-Mobile or smaller U.S. carriers often fill in holes in their coverage by allowing customers to roam onto solely-U.S. owned networks like AT&T. This is one spot where the NSA can intercept the phone data.

And ultimately the NSA can always monitor at an even lower level, if necessary -- the high speed telecommunications backbone that underlies both landlines and wireless networks. And that infrastructure is solely owned by U.S. firms -- AT&T and Verizon Business Network Services Inc. (a subsidiary of Verizon Communications). Thus regardless of who owns the cellular carriers, the NSA can (and in many cases reportedly already does) seize communications at the lowest level, eliminating pesky civil liberties complaintsby foreign nations.

Communications can be seized at the U.S.-owned backbone that underlies wireless networks.
[Image Source: AP]

In a letter to Rep. Edward Markey (D., Mass.) Verizon Wireless admits [PDF] it did turn over records some of the time. It says it responded to 260,000 customer data requests in 2011 (although it did not say how many customers were involved per request). Of those half of the orders were without warrant (due proccess) while approximately half were via a court order or warrant.

According to sources, U.S. officials recognized the foreign leadership of T-Mobile and Verizon Wireless might lead them to buck the data gathering if they pushed the issue too hard. So the feds kept their requests relatively small, knowing they could seize the information they missed further down the pipe.